For example, you might prefer to pass your share to your children, rather than a spouse 😉 This means that if your partner remarries, your children will still own some of the house whatever happens, and can claim a portion of the revenue from the sale, if it had is sold 🔥 They can also benefit from the extra ‘main residence’ tax allowance. If you are tenants together, you have the option to decide which portion of your property you will own. Instead of having half the property you might have 25%. So, you could use a tenants in common arrangement to make sure that your estate’s value comes in under the inheritance tax allowance.
When two people own a property together the property will be held, in terms of legal title, either as ‘joint tenants’ or as ‘tenants in common’. The primary difference is that when a property is owned as ‘tenants in common’ each party owns a distinct, identifiable share in the property. If one or both parties make a bigger contribution to the purchase, they may agree that the more substantial party will be entitled to a higher share. If one of the parties contributes more to the purchase price, they agree that the party contributing the largest share will own a greater percentage. Party passes away a property owned as ‘joint tenants’ will automatically pass to the other owner, but when the property is owned as ‘tenants in common’ the deceased person’s share can be passed to a third party by way of their will. Thank you to Tessica bloom for this wonderful information.
These experts are at litrg.org.uk For more information, please contact HMRC. If accounts are owned in the joint name of spouses and civil partners, it is assumed that income will be divided equally. Unless the taxpayers send HMRC form 17, they can tell HMRC to split the income in a different percentage. By completing the form, joint account owners declare that the underlying Capital (which is basically the balance in your accounts) is in this proportion. For other joint holders, it is a question of fact as to how much capital belongs to each account holder – and each account holder is entitled to the same proportion of any interest.
No matter what the method, property is owned (and how it will be treated for succession purposes), the deceased’s share of jointly owned property will form part of the deceased’s estate for inheritance tax (IHT) purposes (although an exemption will, of course, apply where the deceased’s share passes to their spouse/civil partner). It will therefore be important to understand how a share of jointly owned property is valued on death of one of the joint owners – particularly if the property is left to someone other than a spouse/civil partner as this will determine the amount of IHT payable on first death and the amount of transferable nil rate band available to the survivor (if relevant). Cj Connell (Huaibei in China) for this.